BlackLine Q4 Earnings: Surprising Revenue But Subdued Guidance

BlackLine (NASDAQ: BL) released its Q4 CY2024 results, exceeding analysts' revenue expectations with an 8.8% YoY increase to $169.5 million. However, its Q1 CY2025 revenue outlook of $167 million fell short of estimates, coming in 2.1% below consensus. Non-GAAP EPS of $0.47 missed analysts' consensus by 6.4%.

Key Q4 Highlights

* Revenue: $169.5 million (8.8% YoY growth)
* Adjusted EPS: $0.47 (6.4% miss)
* Adjusted Operating Income: $30.65 million (1.9% miss)
* Customer count: 4,443 (up from 4,433)

Management Guidance

* FY2025 Revenue: $702 million (1.4% miss)
* FY2025 Adjusted EPS: $2.04 (10.6% miss)

Financial Metrics

* Operating Margin: 3.7% (down from 8.2%)
* Free Cash Flow Margin: 21.6% (down from 29.8%)
* Net Revenue Retention Rate: 102% (down from 105%)

Market Response

Despite the revenue beat, BlackLine shares dropped 13.6% to $54.79 post-earnings due to the weaker guidance.

Company Overview

Founded in 2001, BlackLine provides software for accounting and finance automation. Its cloud-based solutions integrate with various enterprise applications, meeting the growing demand for user-friendly and integrated finance software.

Growth Potential

BlackLine's sales have grown at a 15.3% CAGR over the past three years. While this is solid growth, it falls slightly short of the software sector average.

Customer Retention

BlackLine's net revenue retention rate of 104% indicates that existing customers continue to spend more on the company's products and services over time, despite the decline over the past year.

Key Takeaways

BlackLine's strong customer growth is encouraging, but its conservative guidance raises concerns about future demand. The stock's decline post-earnings reflects this sentiment. It remains to be seen if BlackLine can regain momentum in the upcoming quarters to justify its current valuation.